Bio-Logic Reports 67% Increase in Second Quarter Earnings Per Share; 19% Sales Increase Led By Rebound in Neurology and Sleep Systems.MUNDELEIN, Ill. -- Launches New HALO Ear Muffin(TM) Hearing Disposable into Estimated $20 Million Market Bio-logic Systems Corp. (Nasdaq:BLSC BLSc Bachelor of Library Science BLSC Black Lion Swimming Club (UK) BLSC Boulders, Silt and Clay (lithological term) BLSC Bond Lake Skating Club (Oak Ridges, Ontario, Canada) ), a designer and marketer of computerized computerized adapted for analysis, storage and retrieval on a computer. computerized axial tomography see computed tomography. medical electro-diagnostic equipment and disposables, today reported financial results for the fiscal second quarter and six months ended August 31, 2004. The company reported strong sales growth in neurology neurology (n  rŏl`əjē, ny–), study of the morphology, physiology, and pathology of the human nervous system. and sleep systems, and in its international hearing business.Second Quarter Results Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight for the second quarter ended August 31, 2004, increased 19.0 percent to $8.2 million, compared with $6.9 million for the same quarter of the prior fiscal year. Gross profit margin Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. decreased, however, to 67.1 percent from 67.6 percent for the same period of the prior fiscal year, due primarily to changes in product mix within electro-diagnostic products and systems. Total selling, general and administrative expense (SG&A) for the quarter increased $192,000 to $3.3 million, compared to $3.1 million for the second quarter of fiscal 2004. This increase was due primarily to expenses associated with the higher sales, partially offset by reductions in advertising and certain professional services (job) professional services - A department of a supplier providing consultancy and programming manpower for the supplier's products. . Research and development expense (R&D) increased $138,000 to $1.3 million, compared to $1.1 million for the same period of the prior fiscal year, due primarily to higher software development costs. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. for the quarter was $975,000, compared to $459,000 for the same quarter of the prior fiscal year. Net income for the quarter was $703,000, or $0.15 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared to $400,000, or $0.09 per diluted share, in the second quarter of fiscal 2004. Income tax expense of $301,000 was 30 percent of income before income taxes in the second quarter of fiscal 2005, compared to $81,000, or 17 percent of income before income taxes, in the same period of fiscal 2004, primarily due to lower research and experimentation tax credits recorded in fiscal 2005. Six Months Results For the six months ended August 31, 2004, net sales increased 9.4 percent to $14.5 million, compared with $13.2 million for the prior fiscal year. However, gross profit margin decreased to 67.1 percent from 67.4 percent, due mainly to changes in product mix within electro-diagnostic products and systems. SG&A for the first six months of fiscal 2005 increased $385,000 to $6.3 million, compared to $5.9 million for the same period in fiscal 2004. The increase was primarily due to higher sales and marketing costs related to the introduction of new disposable products Disposable products are items that are not intended by the manufacturer to be reused more than once or a few times as compared to more permanent serviceable and reusable items. Some products that have disposable versions are:
Communication between parties at a distance from one another. Modern telecommunication systems—capable of transmitting telephone, fax, data, radio, or television signals—can transmit large volumes of information over long distances. costs and reduced expenses for certain professional services. R&D increased $134,000 to $2.3 million, compared to $2.1 million in the prior fiscal year, primarily due to higher software development costs, partially offset by reduced consulting expenses. The company had operating income of $1.1 million in the first half of fiscal 2005, compared to $837,000 for the first six months of fiscal 2004. Net income for the six months was $817,000, or $0.18 per diluted share, compared to $674,000, or $0.15 per diluted share, for the same period of the prior fiscal year. Income tax expense of $348,000 was 30 percent of income before income taxes in the first six months of fiscal 2005, compared to $203,000, or 23 percent of income before income taxes, in the same period of fiscal 2004, primarily due to lower research and experimentation tax credits recorded in fiscal 2005. Cash and cash equivalents at August 31, 2004, were $14.5 million, an increase of $1.8 million from the February 29, 2004 fiscal year end. Book value per share at the end of the fiscal 2005 second quarter increased to $5.05, up from $4.86 at the end of fiscal 2004. "Our strong second quarter performance was led by a significant rebound rebound (rē´bownd), n/v 1. a recovery from illness. n 2. an outbreak of fresh reflex activity after withdrawal of a stimulus rebound adjective in our domestic electro-diagnostic systems," said Roderick G. Johnson, president and chief operating officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. , commenting on the results. "We experienced double digit Noun 1. double digit - a two-digit integer; from 10 to 99 integer, whole number - any of the natural numbers (positive or negative) or zero; "an integer is a number that is not a fraction" improvements in both our Ceegraph(TM) and Sleepscan(TM) products, with particularly strong results in sleep apnea sleep apnea, episodes of interrupted breathing during sleep. Obstructive sleep apnea is a common disorder in which relaxation of muscles in the throat repeatedly close off the airway during sleep; the person wakes just enough to take a gasping breath. monitoring systems. Domestic hearing system sales System sales is a business term used in the franchising industry. Franchisors provide supplies, marketing and administration services to franchisees in return for a part of the franchisees' revenues. Some franchisors also operate some outlets directly. , which were led by our AuDX(R) handheld hearing screener, slowed somewhat from recent levels, but still grew a respectable 8 percent in the first half compared to the first half of fiscal 2004. The quarter also benefited from strong international hearing system sales, which overcame a slow first quarter to post 14 percent growth in the first six months of fiscal 2005 compared to the same period of fiscal 2004, led by the Navigator See Netscape Navigator, Netscape and Norton Navigator. Navigator - Netscape Navigator (R) Pro MASTER(TM) and AEP AEP - Application Environment Profile ." Looking Forward "Based on the positive signs in the first half, we are hopeful that the momentum in our electro-diagnostic products can continue," Johnson added. "Sleep apnea monitoring is becoming an increasingly important part of our electro-diagnostic systems business and should further benefit from the new Sleepscan VISION(TM), which we began shipping in June. We have added some major new customers in the sleep area, as well as increasing sales to existing customers, and our strong emphasis on customer training also appears to be adding to the improved results. "The Navigator Pro continues to be our strongest product in the international marketplace, and though sales were only about even with last year domestically in the first six months, we expect improving results going forward. Bio-logic was recently notified that the Navigator Pro MASTER has been given Frost & Sullivan's 2004 Excellence in Technology Award in recognition of the product's innovative design that offers integrated solutions for hearing screening and diagnostics. MASTER operates on the cost effective Navigator Pro system, a modular diagnostic platform that does not require advanced computer skills to operate. We are proud to have been chosen for this prestigious award, which should add to the already strong acceptance of this fine product in the marketplace. "Building on the success of our well-attended new technologies educational seminar series presented last year, we are currently working with an initial five universities to implement ACE - Auditory Centers Noun 1. auditory center - the part of the brain (in a fold of the cerebral cortex of the temporal lobe on both sides of the brain) that receives impulses from the ear by way of the auditory nerve for Excellence - our innovative program in partnership with thought leaders in the hearing community. These five institutions will serve as the model for the ACE program, which we plan to eventually offer at over ten sites across the country. This new program is intended to elevate el·e·vate tr.v. ele·vat·ed, ele·vat·ing, ele·vates 1. To move (something) to a higher place or position from a lower one; lift. 2. To increase the amplitude, intensity, or volume of. 3. the level of clinical competency COMPETENCY, evidence. The legal fitness or ability of a witness to be heard on the trial of a cause. This term is also applied to written or other evidence which may be legally given on such trial, as, depositions, letters, account-books, and the like. 2. of students, educators and practitioners through the power of continuing education continuing education: see adult education. continuing education or adult education Any form of learning provided for adults. In the U.S. the University of Wisconsin was the first academic institution to offer such programs (1904). , and will further enhance Bio-logic's reputation as the industry leader in hearing diagnostics and infant screening. "During the second quarter we launched the new HALO Ear Muffin, our over-the-ear acoustic coupler A device that connects a terminal or computer to the handset of a telephone. It contains a shaped foam bed that the handset is placed in, and it also may contain the modem. that can be used with our ABaer(R) and Navigator Pro MASTER systems. The HALO has also been demonstrated to be acoustically a·cous·tic adj. also a·cous·ti·cal 1. Of or relating to sound, the sense of hearing, or the science of sound. 2. a. Designed to carry sound or to aid in hearing. b. equivalent to the Natus(R) ALGO ALGO Algorithm (R) Flexicoupler(TM), and we intend to target our competitor's customers with this high quality, lower cost alternative. Although just beginning to generate sales, the HALO has thus far been well-received in trials, and we expect that it will become a significant product in what we estimate to be approximately a $20 million market," Johnson concluded. About Bio-logic Bio-logic Systems Corp., headquartered in Mundelein, IL, designs, develops, assembles and markets computer-based electro-diagnostic systems and related disposables for use by hospitals, clinics, school districts, universities and physicians. The systems conduct tests that are typically used by medical practitioners to aid in the diagnosis of certain neurological disorders This is a list of major and frequently observed neurological disorders (e.g. Alzheimer's disease), symptoms (e.g.back pain), signs (e.g. aphasia) and syndromes (e.g. Aicardi syndrome). , brain disorders and tumors and sensory sensory /sen·so·ry/ (sen´sor-e) pertaining to sensation. sen·so·ry adj. 1. Of or relating to the senses or sensation. 2. disorders, including audiological and hearing screening and diagnosis. Cautionary Note Regarding Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. This release contains forward-looking statements (as such term is defined in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934), including statements under the caption "Looking Forward," that reflect management's current expectations about Bio-logic's future results, performance, prospects and opportunities. Management has attempted to identify these forward-looking statements by using words such as "may," "will," "expects," "anticipates," "believes," "intends," "estimates," "could," "should" or similar expressions, but these words are not the exclusive way of identifying these statements. These forward-looking statements are based on information currently available to management and are subject to a number of risks, uncertainties and other factors that could cause Bio-logic's actual results, performance, prospects or opportunities to differ materially from those expressed in, or implied by, these forward-looking statements. These risks, uncertainties and other factors include general economic and business conditions, turnover in Bio-logic's sales force, lack of acceptance of new technology by clinicians and other healthcare professionals, the results of research and development efforts, technological changes, competition, potential changes in regulation by the FDA FDA abbr. Food and Drug Administration FDA, n.pr See Food and Drug Administration. FDA, n.pr the abbreviation for the Food and Drug Administration. , costs relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc manufacturing of products, the timing of customer orders, the ability of certain suppliers to meet requirements, Internal Revenue Service determinations and other facts affecting the realization of the anticipated tax credits and other factors detailed from time to time in Bio-logic's filings with the Securities and Exchange Commission. You should not place undue reliance on any forward-looking statements. Except as expressly required by the federal securities laws, Bio-logic undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or or any other reason after the date of this release. Financial Table Follows...
Bio-logic Systems Corp. and Subsidiaries
Condensed Consolidated Statement of Operations and Retained Earnings
(Unaudited)
(In Thousands, Except for Share Amounts and Per Share Data)
Three Months Ended Six Months Ended
August 31, August 31,
--------------------- ---------------------
2004 2003 2004 2003
---------- ---------- ---------- ----------
NET SALES $8,242 $6,927 $14,493 $13,246
COST OF SALES 2,710 2,241 4,769 4,316
---------- ---------- ---------- ----------
Gross Profit 5,532 4,686 9,724 8,930
---------- ---------- ---------- ----------
OPERATING EXPENSES:
Selling, general &
administrative 3,287 3,095 6,334 5,949
Research & development 1,270 1,132 2,278 2,144
---------- ---------- ---------- ----------
Total operating
expenses 4,557 4,227 8,612 8,093
---------- ---------- ---------- ----------
OPERATING INCOME 975 459 1,112 837
OTHER INCOME (EXPENSE):
Interest income 29 22 60 38
Interest expense (1) - (8) -
Miscellaneous 1 - 1 2
---------- ---------- ---------- ----------
Total other income 29 22 53 40
---------- ---------- ---------- ----------
INCOME BEFORE INCOME TAXES 1,004 481 1,165 877
PROVISION FOR INCOME TAXES 301 81 348 203
---------- ---------- ---------- ----------
NET INCOME $703 $400 $817 $674
========== ========== ========== ==========
RETAINED EARNINGS,
BEGINNING OF PERIOD 15,558 13,836 15,444 13,562
---------- ---------- ---------- ----------
RETAINED EARNINGS, END OF
PERIOD $16,261 $14,236 $16,261 $14,236
========== ========== ========== ==========
EARNINGS PER SHARE:
Basic $0.17 $0.10 $0.19 $0.16
========== ========== ========== ==========
Diluted $0.15 $0.09 $0.18 $0.15
========== ========== ========== ==========
BASIC SHARES OUTSTANDING 4,263,371 4,202,396 4,259,761 4,200,126
DILUTED SHARES OUTSTANDING 4,586,729 4,398,824 4,568,446 4,390,920
SELECTED BALANCE SHEET DATA
As of As of
August 31, February 29,
2004 2004
---------- -----------
Cash and marketable
securities $14,517 $12,750
Current assets 23,418 22,955
Total assets 27,186 27,194
Current liabilities 5,313 6,243
Long-term obligations - -
Shareholders' equity 21,167 20,279
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